As a percentage of its population, Australia has one of the highest rates of immigration in the
democratic world. It is also a country that is frequently emulated in terms of its skilled, asylum and
integration policies. What happens in Australia with regards to immigration policy reform has
implications for many other nations.
Immigration policy reform in Australia in recent years has seen seminal policy reviews into the exploitation of migrants, Australia’s net overseas migration and the nature of international student migration. Published in March 2023, the Migration System for Australia’s Future report (known as the Parkinson Review) is a product of these reviews and policy debates.
When the Parkinson Review was published in March 2023, it was met with differing reactions. This landmark policy statement outlines a series of trade-offs and challenges that the government will have to reckon with in formulating Australia’s immigration program over future decades. Appropriate responses to these trade-offs will require a careful balancing of competing factors.
The first challenge will be to balance immigration growth and social trust. Evidence from Australia and overseas shows that immigration systems are most likely to be accepted by society when they are well managed. When there are concerns about increased immigration and competition with the domestic population, or where conflict emerges over scarce resources, anti-immigrant sentiment tends to increase.
The Review reveals that trust in Australia’s immigration system was at its highest in 2021, when immigration was at its lowest since World War II due to protracted COVID-19 border closures. Sharp and unanticipated increases in net overseas migration, even in multicultural societies like Australia, can hamper social trust in immigration.
This does not mean that immigration programs should be driven by popular opinion, but does highlight that immigration is likely to become more politically challenging for governments when it reaches a certain level. This is especially the case if there are perceived negative externalities such as labour market exploitation or a strain on housing availability or other infrastructure.
While there is limited economic evidence that the scale of immigration into Australia affects domestic unemployment, a core argument of the Review is that minimising inequality in the labour market and upholding the principle of a ‘fair go’ are key to ensuring support for future immigration programs.
The Review identifies some areas for reform that the government has already or is currently implementing, such as tripartite management and visa mobility. Under tripartite management, representatives from industry, unions and government will be able to make recommendations and provide input on labour market gaps. Greater mobility for temporary visas holders will allow them to seek employment across a whole sector rather than their visa being linked to one single employer, which will put them at less risk of exploitation.
The Temporary Skilled Migration Income Threshold was also raised from AU$53,900 (US$35,400) to AU$70,000 (US$46,000). This is consistent with evidence that lower paid migrants are more likely to experience labour exploitation than those in higher salary brackets.
Extending the Pacific Island Mobility (PALM) visa could provide more opportunities for low and semi-skilled workers to enter Australia. But the PALM visa has also been the subject of underpayment concerns and so it is unclear whether entry through this visa would solve some of the exploitation issues that bedevilled the skilled migration visa.
Other changes proposed in the Review, such as reframing the subclass 485 Temporary Graduate visa to service a small number of in-demand areas or high calibre graduates, could see significant reductions in international student flows. But any such reduction is likely to see pushback from the higher education sector among other affected groups. It is perhaps on this basis that the proposed changes (if any) to the Temporary Graduate visa have not yet been announced by government.
The Review found that the labour market outcomes of many international graduates has declined and are not commensurate with their levels of tertiary training. This has left large numbers of Temporary Graduate visa holders with low salaries and created a growing income gap between them and domestic graduates. The Review recommends either guaranteeing that a small number of high-quality international students will gain permanent residency or shortening the maximum duration of Temporary Graduate visas, both of which are likely to see reductions in the overall number of international students with post-study work rights.
Given that these rights are an attractive element of Australia’s international student model, any reduction in such rights could have flow-on effects for the higher education sector as a whole. Achieving the correct balance between better regulation of the immigration system and protecting a critical dimension of Australia’s higher education will be another key challenge in reforming immigration policy.
Underpinning any reform will be the challenge of creating effective policy in a complex immigration system that overlaps with various other sectors, such as higher education, the labour market and even Australia’s fiscal settings.
Any immigration system design must contend with the independent decision-making of millions of potential migrants. Oftentimes immigration policies do not have the scale of effect that is intended or even the desired impact due to the unanticipated consequences of policy design. The potential externalities of any immigration policy will need to be part of the government’s calculus. Careful program design and reliance on empirical data will be a core aspect of this reform agenda to ensure that policy responses are as targeted as possible.
Immigration carries both foreign relations and foreign development implications and as such is a central pillar for protecting Australia’s ties to the region. Strengthening relationships with Pacific nations through visa schemes could carry clear development benefits and elevate Australia’s international standing more broadly.
Anna Boucher is Chair of the Discipline of Government of International Relations and Associate Professor in Public Policy and Comparative Politics at the University of Sydney.